Chennai: Crisis cuts into real estate prices

CHENNAI: For those dithering over buying that dream house, a piece of good news! Built up space prices are at their rock bottom in Chennai with the lowest priced apartments on sale at Old Mahabalipuram Road in the (OMR) metro.

But for the realty sector, the economic slowdown has affected the OMR region the most. “A 35 per cent drop in prices can be witnessed across the board. From Rs 3,800 per sq ft at the end of August, prices have dropped to Rs 3,200 and Rs 3,500 per sq ft. A two-bedroom apartment earlier priced at Rs 50 lakhs is now selling for Rs 44 lakhs on the OMR,” Pratish Devadoss, Managing Director, VGN Developers Pvt Ltd told.

In some parts of the city, prices are believed to hover around Rs 11,000 per sq ft where they have fallen by 20 per cent. Devadoss expects a further 5 per cent fall in prices over the next six months on apartment prices in the metro and advises a ‘Wait and watch’ approach.

“More land is available on the OMR, being outside the city. Moreover, most of the apartments were to be bought by IT professionals.

But due to massive cost cutting and layoffs by IT companies, real estate prices have been affected,” said Prakash Challa, Managing Director, SSPDL.

Meanwhile, one lakh construction workers in the real estate sector have lost their jobs on projects that were launched 6 months ago and are now on hold in the city. These include both unskilled and semi-skilled workers including masons, carpenters, fitters and helpers. This number is expected to rise to about 10 to 12 lakh over the next couple of months as more projects get stalled.

“About 10 to 15 real estate projects are on hold in Ambattur, OMR, ECR and GST Roads in the metro with 70 per cent being housing and the balance commercial projects. Each project would be worth Rs 500 crore,” said Challa.

Each company employed from 5,000 to 10,000 workers who were working on different projects on a daily wage of about Rs 250.

These cannot be retained any more. “For every 100 workers, one new middle level job would be generated. So about 150 new middle level jobs have also been lost,” said Challa.